By Ben Sharples and Christian Schmollinger Feb. 3 (Bloomberg) -- Oil pared gains to trade near $77 a barrel in New York after an industry report showed an increase in commercially held crude stockpiles in the U.S., the world’s biggest energy consumer. Oil declined for the first day in three after the industry- funded American Petroleum Institute said crude inventories rose 4.72 million barrels last week. An Energy Department report today may show stockpiles climbed 400,000 barrels, according to a Bloomberg News survey of analysts. “The market looks much better supplied in terms of crude as well as refining capacity,” Soozhana Choi, Asia head of commodities research at Deutsche Bank AG, Germany’s biggest bank, said in a Bloomberg Television interview. “Inventories will remain elevated and oil-price rallies will be difficult to sustain for this year.” Crude oil for March delivery dropped as much as 45 cents, or 0.6 percent, to $76.78 a barrel in electronic trading on the New York Mercantile Exchange. It was at $77.02 at 12:08 p.m. Singapore time. Yesterday, the contract gained 3.8 percent, the most since Sept. 30, to settle at $77.23. U.S. crude oil stockpiles reached 330.4 million barrels last week, the highest in five weeks, as imports rebounded, according to the API. Supplies are “a bit more than expected and that could be the reason for a little bit of weakness,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. Gasoline Stockpiles The Energy Department’s weekly report, due today at 10:30 a.m. in Washington, will probably show gasoline inventories increased a fifth week. Stockpiles of the motor fuel climbed 1.4 million barrels in the week to Jan. 29, according to the median of estimates from 16 analysts surveyed. Supplies previously reached 229.4 million, the highest since March 2008. U.S. gasoline futures jumped 4.4 percent yesterday after a report showed demand at a six-week high. Motorists bought an average 9.42 million barrels a day in the week to Jan. 29, according to MasterCard Inc.’s SpendingPulse report. Consumption rose 0.5 percent from the prior week. Oil advanced yesterday on data showing sales of previously owned homes in the U.S. grew in December following a record drop, while the dollar’s decline spurred investors to buy commodities. Prices also climbed after U.S. equities rose as profit at companies from Lexmark International Inc. to D.R. Horton Inc. topped estimates. U.S. Manufacturing Futures gained 2.1 percent on Feb. 1 after the Institute for Supply Management’s factory index showed U.S. manufacturing expanded at the fastest pace since 2004. Manufacturing accounts for about 12 percent of the economy. “There is some question as to whether that is a re- stocking story, whether businesses ran down stocks so heavily and now they’re having to increase production just to increase inventories again,” said Westmore. “There is a little bit of uncertainty around it.” Brent crude oil for March settlement fell as much as 43 cents, or 0.6 percent, to $75.63 a barrel on the London-based ICE Futures Europe exchange. It was at $75.88 at 12:06 p.m. Singapore time. Yesterday, the contract rose 4 percent, the most since Nov. 16, to settle at $76.06. To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Christian Schmollinger in Singapore at christian.s@bloomberg.net

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